Nailing a nerve-wracking speech in front of your ninth-grade class just to look down and realize you’re naked.

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Losing millions on damages, legal fees, fines, and missed opportunities all because you were out of line on an HR compliance issue you didn’t even know about.‍

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Why did I just force you to read that list of your biggest fears?

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Because it’s time to face them.

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HR compliance can be a scary topic. There are significant monetary, reputation, and legal risks involved for companies where HR compliance understanding and enforcement aren’t melded right into their core culture. That’s a lot of responsibility to lay on a single HR department where everybody’s got about a million things to do and what seems like a millisecond in which to do them.

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So today, we’re making it easy for business leaders, HR professionals, and compliance nerds (we love ya!) to:

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Get to know the major areas in which HR compliance tends to get tripped up

Understand the risks you should be concerned about when it comes to non-compliance

Take steps toward working compliance right into your culture and saving what’s left of your sanity

HR’s Core Compliance Responsibilities

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HR stars in the identification, hiring, training, and even retention of the people your organization relies on to execute strategy and hit goals.

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At the same time, HR is also expected to be a pro player on your company’s compliance team.

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Here are some of the major elements US-based HR teams need to understand and be prepared to enforce to keep employee relationships happy, productive, and, of course—legal.

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Fair Labor Laws

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The Fair Labor Standards Act (FLSA) establishes minimum wage and outlines rules around overtime and exemptions, recordkeeping, and child labor standards for both full-time and part-time workers in the private sector and many levels of government.

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With the rise of the independent workforce (42 million and growing!) and the propensity for FLSA regulations to vary from state to state, keeping up with the FLSA can quickly become an overwhelming responsibility for HR teams that are understaffed or ill-prepared.

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Family and Medical Leave Regulations

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There isn’t a seasoned HR professional out there who isn’t familiar with the FMLA, which governs the eligibility of employees to take unpaid leave for very specific family and medical reasons including welcoming a new child, coming down with a serious health condition, or caretaking for a close relative.

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This piece of legislation that keeps an employee’s health care and employment status intact during their leave has been hotly contested over the past several years as marriage regulations change and many US companies strive to keep up with the maternity leave standards in other developed countries.

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Civil Rights Concerns

In other words, federal civil rights laws prohibit the consideration of an employee's race, gender, religion, and other personal factors when it comes to hiring, firing, or setting up any other conditions affecting their employment.

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Not only is government enforcement of this federal law aggressive, I’m sure most of us have heard about at least one private suit filed on the grounds of discrimination sometime in the past year.

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Employing and Re-Employing Service Members

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The Uniform Services Employment and Reemployment Rights Act, or USERRA, protects employees who leave jobs to perform in the uniformed service.

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‍According to the Department of Labor, there were 944 unique USERRA complaints in fiscal year 2017. Of those, over 40 percent pertained to allegations of discrimination based on military service or status. That’s why it’s vital that HR departments understand the complexity of this act which tries to ensure veterans the same or similar jobs and benefits upon their return from active duty.

In most organizations, the HR team will help construct, maintain, and generally oversee employee compensation and benefit packages.

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Just when you thought you’d found relief, we’re here to assure you that’s not nearly as simple as it sounds.

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Administering pay and benefits comes with a whole parcel of compliance concerns, not the least of which includes the Employee Retirement Income Security Act and all its associated reporting, disclosure, and fiduciary requirements.

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In addition, this task requires HR professionals to keep up with the requirements of the Affordable Care Act and its tax provisions that affect everyone from individuals to families, businesses, insurers, tax-exempt organizations, and government entities.

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As government leadership changes hands, the rules surrounding compensation and benefits are sure to fluctuate. We’ve already seen them do so in a big way over the last decade between the implementation of the ACA in 2010 and the repeal of its Individual Mandate that goes into effect in 2019.

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The (Many) Consequences of Getting HR Compliance Wrong

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While fines certainly help make the case more tangible, there are several other risks like insurance lapses, poor public perception, and even jail time associated with ignoring important HR compliance responsibilities.

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Fines, Fines Everywhere

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Per fair labor laws, an employer caught making willful violations owes not just back pay but a fine of over $1,000 per violation. When it comes to child labor, expect that fine to jump up to 11,000 per violation.

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On top of local and federal late fees and penalties, the total cost of misclassifying workers can be over twice the amount they’re owed in overtime—and that’s all before paying legal fees for both sides.

A jury awarded an employee, who was fired after requesting leave for serious mental health concerns, $19,000 for violating her rights under the Family and Medical Leave Act. What may have hurt the company even more was the $80K in legal fees they also had to cough up.

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And after a now-infamous harassment case (graphic material) took out 80 percent of a company’s yearly profits with a $95 million ruling in favor of the victim, it’s clear that poor hiring and training practices—which both start in the HR department—can ruin a businesses.

Unenforceable Contracts and Pricey Insurance Lapses

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Employment contracts that don’t keep up with changing regulations may be unenforceable or even unlawful. Unfortunately, this determination typically comes at the cost of an discovery process and/or legal process and is likely to produce fines and other expenses before the matter is reconciled.

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Similarly, an inability to comply with insurance regulations and timelines may absolve your insurer from their liability and leave your company on the hook for major expenses.

A Lovely Orange Jumpsuit

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Criminal charges and jail time can even affect business leaders who prove to be negligent with employee and public safety in areas like staff management, environmental protection, workplace safety, corporate governance, stock management, due diligence laws, and others.

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Malicious negligence and unwitting negligence aren’t always distinguishable in the eyes of the law. You may want to consider that unless orange really is the new black for you.

Reputation Down the Drain

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Nothing is more heartbreaking than finally watching your company skyrocket into the spotlight...for crashing and burning in court for a violation of HR compliance.

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Public image is another of those factors that is hard to quantify but is tangibly felt within an organization. A bad reputation among the public as well as your internal team may very well be the single reason they needed to switch to a competitor. In addition, the opportunity cost of driving away potential business and partnerships can be staggering.

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It turns out not all publicity is good publicity.

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How to Create a Culture of HR Compliance Without Going Crazy

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While it may be hard to believe that you can achieve a compliant culture without all the crazy, we’re here to convince you otherwise.

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At HelloSign, we’ve worked alongside the HR industry for years. We get how serious the ramifications of non-compliance are and just how little time you have to worry about it.

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That’s why all of our services including HelloSign for enterprise-level eSignature needs, HelloWorks for simplifying complex workflows, and HelloFax for digital faxes are compliant with the standards by which you must govern your business.

However, we also get that HR compliance also needs to run even deeper than the tools you use.

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Instead of wasting your time putting out HR fires, instill these key tactics into your culture so compliance is a priority from day one.

Marry Compliance and Culture with Onboarding

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What a new hire experiences during their onboarding workflow will set the tone for the way they conduct themselves while they’re with the company. That’s why we argue that your culture should be well represented through every part of the onboarding process.

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When executed well, onboarding is the perfect point at which compliance and culture come together. Instilling company-wide respect and concern for HR compliance is way easier to do at the beginning of a working relationship than it is when everyone’s full-tilt on their individual tasks.

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And what better time to kill two HR compliance birds with one stone—making sure your team is observing good compliance habits while also educating new hires on how compliance is key to your culture!

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Especially when it comes to onboarding at scale, making sure you’re ticking all the right boxes to remain complaint is a full time job in itself. There’s manually rifling through very non-secure piles of paperwork, handing all the communication woes that come with remediation, being that annoying person who has to remind their boss to sign something every single day, and wasting tons of time re-entering the same data from paper forms to your internal databases.

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And just imagine what kind of a cluster-cluck that looks like from a new hire’s point of view!

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Set up a smooth onboarding process indicative of a smooth employee experience, with all the HR compliance goodness already worked out for you, with the help of smart workflow automation tool.

Create, Update, and Enforce Your Employee Handbook

Well that doesn’t only apply to your friends over in sales or marketing anymore.

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By instilling this understanding in your core culture it’s going to be a lot easier time making even the silliest-sounding compliance rules stick.

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Employees outside of HR, legal, and other compliance-dependent departments have very little idea what’s going on in the world of compliance. That’s not their job. That’s what you and, by extension, your employee handbook is for.

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Your employee handbook is ultimately the yardstick against which employee behavior will be measured. It’s a tool to communicate in no uncertain terms your organization’s policies and procedures, how business should be conducted, and what will happen if it isn’t conducted that way.

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As a best practice, you’ll want to review this handbook as often as you’re able—especially in cases of big regulation changes or outstanding behavioral issues—to make sure it’s updated to be both legal and a beacon on the culture you strive to achieve.

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We’re going way beyond dress code and vacation days here.

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Don’t Snooze Through Regularly-Scheduled HR Compliance Audits

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What better way to make sure you’re prepared for an emergency than running through a few drills every so often? What works for physical disaster preparedness also works for compliance disaster preparedness.

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Chances are your HR department is understaffed, overworked, or both. If it’s not—wait a week!

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It’s can be a fun, fast-paced environment to work in as long as you aren’t constantly worried about getting caught off guard by an HR compliance misstep—which you likely won’t have the manpower to correct before it becomes disastrous.

And don’t spend your precious sanity manually keeping up with audit trails when important budgetary paperwork is signed off on, major orders are requested, or changes to important legal documentation need to be made. Software that builds non-editable trails right into every single form and workflow make it easy to track who did and saw what and when.

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Problems with HR compliance run deeper than the HR department. Audits can help uncover issues that are negatively affecting your culture, your bottom line, and your very survival as a company.

Level the Playing Field with Accessibility

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Understanding that the rules should be easy to find isn’t the same as them actually being able to find.

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This one’s pretty straightforward: Make your employee handbook and whatever other HR compliance documentation employees need easy to get to. And make accessing, and following, those guidelines as public and as integral to your culture as more “cool” traits like passion, follow through, excellent beer pong skills, etc.

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Plus, the easier you make it for every team member to find, understand, and practice HR compliance the less time you need to spend feeling like the bad guy who has to enforce it!

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How’s that for regaining a little sanity?

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However, Accessibility Doesn’t Mean Weak Security

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At the same time that you want certain things to be accessible, you’re probably dealing with a good amount of sensitive data when you’re talking HR compliance.

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Effective security is that which does the right job at the right time.

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For instances where exposing data would be a huge HR compliance no-no, make sure the tools you’re using coming with bank-level security including firewalls and encryption.

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For those times when you want to be able to share data but it needs to be done in a very specific way, ensure your tool includes non-editable audit trails make it easy to track when certain actions were completed and approved—and by whom. By doing such, you’re building compliance and transparency right into your process so there’s no need to drive yourself crazy worrying over what might happen during your next audit.

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Communicate and Collaborate

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As humans, we have a tendency to wait until it’s too late. Loop in your CHRO, VP of HR, Chief Compliance Officer, and other key compliance personnel well before a compliance issue pops up.

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With a good idea of each person’s skill set and workload, it will be a lot easier for teams that don’t regularly work together to coalesce around and remediate any HR compliance mishaps before they get ugly.

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Make sure collaboration is part of your company culture outside of your compliance circle, as well. Employees on the “outside” should know how to get their questions answered and feel comfortable asking them.

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When your whole company has an appreciation for and understanding of HR compliance you’ll be faster at catching issues, better at preventing them in the first place, and closing your days at a reasonable time with a reasonable amount of brain cells left.

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Have Whistleblower and Disciplinary Procedures At the Ready

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Of course we all like to imagine whistleblowing isn’t something we’ll ever see or will ever be needed where we work, but that possibility for surprise is all the more reason to have a program in place for if it does unfortunately occur.

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HR departments should coordinate with other departments that handle compliance, including the legal team, to create a program that encourages internal reporting. In addition to the reporting itself, a good whistleblowing procedure considers backlash protections for the informant and tactics to respond to the complaint in an effective yet discreet way.

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Once employee conduct is outlined in a thoroughly clear and accessible employee handbook, it’s important that HR has an equally-clear disciplinary procedure in place for those who choose to operate outside of it.

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This is again an area where HR departments should consult with other internal compliance and legal pros to ensure the process is a fair one that takes care of disciplinary matters—and the workers who cause them—in a legal, expedient way.

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Whistleblowing and disciplinary action are kind of a bummer to talk about. However, in the age of digital transformation we know how fast reputations tarnish and the legal hammer drops on companies that are non-compliant. It’s much more effective to be prepared for bad news than it is to clean up its disastrous effect on your culture and bottom line later on.

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There are many responsibilities—and maybe even more risks—when it comes to maintaining HR compliance. But that doesn’t mean compliance and culture have to be at odds. There’s no need to drive yourself crazy trying to make both work.

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While you focus on building up a culture that prioritizes effective onboarding, information transparency, reasonable security, communication, collaboration, and more; give yourself back some sanity by automating at least a few of the complexities of HR compliance.